This week on Planet Bitcoin - 29 May 2015

Friday 29 May 2015

Weekly market report and news from Dynacoins, first community-supervised mutual bitcoin fund.

Another quiet one, with movements of just a few dollars. The now-familiar pattern continues with little variation and the end of one week sees us close to where we were at the end of the last, with a couple of sudden spikes up and down in the meantime. These are unimpressive for bitcoin, no more than five dollars here and there, and are only really worth remarking upon due to the otherwise flat nature of the market in between.

Weekly chart

For the whole week, bitcoin has traded within a range of only $7 or so, with a low around $234 and a high just about $241. Looking back a month, the trading range is only $25, and barely over $50 for two months. This is very clearly a consolidation phase, and it seems to be getting more and more conservative as time goes on, with smaller and smaller fluctuations. Even the clear market manipulation – large traders buying and selling to try to provoke a reaction – is trailing off. Flatlining just below $240, it’s inevitable that something has to give soon, but whether the result will be the much-anticipated rally or a last big sell-off can’t be predicted.

Around Bitcoinland

A few bits of news are worth mentioning this week. Bitfinex, considered by many to be the leading global exchange, was hacked and closed to deposits for a short time. Around 1,500 bitcoins were stolen from its hot wallet – relative peanuts, given its volume. Bitfinex now has higher volume than Bitstamp, which was itself hacked for a massive sum of 19,000 bitcoins early this year. The vast majority of Bitfinex’s coins are kept in multisig wallets and the company has said it will absorb the loss. The market barely reacted to the news at all.

Forum was also hacked, resulting in the loss of a large amount of data. The site’s server was compromised, leading to the probable theft of various account information including email addresses, password hashes, last-used IP address and registration IP address, secret question and a basic hash of secret answer, and other settings. Users have been advised to change their passwords as a matter of urgency, and delete or change their secret question.

The Chinese stock market recorded one of its worst days in 15 years on Thursday, falling 6%. After many months of steady gains, analysts have been concerned that the market was overheating, and this seems to have been the case. The sharp fall may well be the start of a broader correction as the bubble deflates. The silver lining for crypto seems to be that some of this money is leaving the stock markets and coming back to various cryptocurrencies. Bitcoin, which rose tenfold in 2013 fuelled by Chinese speculators, is not being touched this time – perhaps because so many people were burned before. Instead, a number of altcoins have seen several days of single and double-digit rises this week, led by exchanges that allow trading against CNY.

Finally, an enthusiast has managed to coax an IBM 1401 mainframe from 1959 to mine bitcoins. Whilst the fastest ASICs run at several TH/s, the 1401 plods along at one hash every 80 seconds or so meaning that, at the present Difficulty, the heat death of the universe will occur before it mines a block.

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